It can be tricky to know what to do with your money, especially during tax return season. Do you save every penny? Do you pay down that debt that’s been weighing you down? The ideal solution would be something in the middle, but sometimes you need to prioritize one over the other.
Here are 3 ways to make the most of your tax return:
- Start an Emergency Fund
A popular piece of advice often talked about is having a rainy-day fund, also known as an emergency fund. This is a fund that you should have readily available in the case of an emergency or an unexpected expense that pops up. The common suggestion is 3 to 6 months’ worth of your expenses saved up, which considers every fixed and variable expense that you have today.
For someone who has no savings today, 3 to 6 months of expenses saved up may seem impossible, but it is important to remember that anything is better than nothing. Having 1 month, or even 2 weeks can be a great place to start. If this is you, you are not alone. In fact, 4 in 10 adults reported that they would have difficulty covering an unexpected expense of $4001.
- Pay Off High Interest Debt
Payday loans, high interest credit card debt, and auto loans with high interest rates are some of the high interest debts that have captured the communities we live in. If this is you, it might be a good idea to prioritize paying those debts with your return. High interest debt has a way of snowballing into more and eating away at your budget.
Whether you’re newly married, a parent planning for a child's education, or a worker planning for retirement, intelligently investing your money can help you reach your long-term financial goals.
Investing might be the option for you, but where do you put the money? Is it the stock market? An IRA? Most people don’t know where to start, and don’t feel comfortable doing this alone. The good news? You don’t have to. There are financial advisors that are always available to help you get there.
We’ll Help You Get There
The right move isn’t going to be the same for everyone, and depends on the situation that you find yourself in. The above tips are certainly not an all-inclusive look at your options or may not apply to your situation. If you are looking for more personal advice catered to your exact circumstances, we can help you get there! Make an appointment at one of our branches today.